Monday, 21 May 2012

Killer Arguments Against LVT, Not (217)

City AM gives its own Tax Commission a glowing review...

Many reform proposals include new or higher taxes on property.(1) There's a reason that the UK – which raises more in property taxes than any other developed economy (2) – only gets 4.2 per cent of GDP from them. People hate council tax like no other tax.(3) In the US, property taxes cause more taxpayer rebellions than any other category.

There are two reasons. First, those taxes tend to be taken as a lump sum, instead of deducted from wages.(4) Second, they aren't attached to a stream of income that can be used to pay the tax.(5) Someone can have a property but not enough income to pay an annual tax.(6) Forcing people out of their homes is ugly.(7)


1) The sophisticated ones propose higher taxes on the rental value of land; the word "property" as synonymous with "land and buildings" is just a symptom of Home-Owner-Ist brainwashing.

2) That's a lie, but never mind.

3) True, but that's because people believe their own propaganda about Council Tax.

4) Then collect them via people's PAYE codes, by netting them off with state and public sector pensions, via the Self-Assessment system etc. That's dead easy.

5) Whereas rent and mortgage payments pay themselves out of thin air, of course.

6) Yup, some people have arranged things this way to suit themselves, but they are of course doing it at the next generation's expense. They voted for this and imposed this, and in a democratic world, people are allowed to vote for something better or something different.

7) The whole history of Home-Owner-Ism, going back to the Enclosures, is about forcing people out off their land and out of their homes; the Homeys are determined to restrict new supply; push younger people to the brink of poverty and beyond by ramping up house prices and rents; the landlord's main negotiating tool is that the state will force tenants out of their homes if they don't pay the rent etc.

Depriving other people of somewhere affordable to live is the Home-Owner-Ist weapon of choice, they can't bleat too hard if the boot is on the other foot; in any event, if we had taxes on the rental value of land rather than on earned income, everybody would be able to afford somewhere to live; the land won't just disappear, it will continue to be occupied by those willing and able to pay for it.

96 comments:

Maverick said...

No Mark .. they are correct.

However the main problem with taxes is that the 'government' is in control.

Taxes should only have been raised to fund a finite number of services for the 'public good' and the officials merely administrators and accountants.

'Public spending' is out of control and officials who make the decisions (whilst they may be intelligent) lack commonsense or ability to the big picture. Hence the mess the country is in ...

Why should the ordinary workers be forced to pay for 'state incompetence' and overspending ?

Whether it is through VAT, income tax, NHS, tax on savings, inheritance tax, capital gains tax or the myriad of other stealth taxes such as parking, toll booths, stamp duty, speeding fines ..

The problem is the system is corrupt and full of public schoolboy ponces sucking at the teat of the private sector ..

So your constant harping on about LVT v Income tax quite frankly sickens me

Mark Wadsworth said...

M; "your constant harping on about LVT v Income tax quite frankly sickens me"

I'm glad to hear it! What you Homeys completely ignore is that the government is itself the vanguard of the Home-Owner-Ist movement - this is what you voted for.

Kj said...

Then collect them via people's PAYE codes, by netting them off with state and public sector pensions, via the Self-Assessment system etc. That's dead easy.

PAYE and other tax by source instruments is a stroke of genius as tax compliance psychology goes. I know several people who have part PAYE income and part self-employment income, and they can sit and be taxed extortionate amounts through PAYE without too much fuss, but if they have to pay in a much smaller figure on their self-employment income after the tax-return is done, they'll unleash theirfury. It's thoroughly unlibertarian ofcourse, but works like a charm...
The only problem would be the cognitive task of explaining to homeowners why their renting colleagues doesn't appear to be taxed at all.

Mark Wadsworth said...

Kj: "The only problem would be the cognitive task of explaining to homeowners why their renting colleagues don't appear to be taxed at all."

In that case, they're free to sell up and start renting again :-)

Lola said...

...In the US, property taxes cause more taxpayer rebellions than any other category... I would have thought that that was an argument for LVT. When people can actually see how much money they are being coerced to shell out they'll be a damn' site more vocal in arguing for tax cuts and control of state spending.

Mark Wadsworth said...

L, true, let's stick that in as objection 3a). And it would mean that more money is shelled out again as Citizen's Income because that reduces the number of net payers.

Maverick said...
This comment has been removed by the author.
mombers said...

"Forcing people out of their homes is ugly"
This only applies to first class citizens, i.e. homeowners

Maverick said...

Mark - those that would like to save, buy property and escape taxation when they retire (after a working life) should be allowed to do so ... If you own your home and do not rent it out .. why should you be taxed. They already pay for the services associated with the property via council tax. (Not that goes to pay for services ... no that is used to fund pensions for useless fat fucks).

The country is screwed and I suspect you know that anyway ... but you continue this charade !!

I also didn't vote for any of them Mark ... one set of those crooked bastards are much the same as the others.

Mark Wadsworth said...

M, you have clearly fallen for one of the Big Fat Lies associated with Council Tax, which means trying to have a serious debate is pointless, especially the finer points of economics i.e. that all landowners place a burden on 'everybody else' and they are backed up by the force of the state.

"those that would like to save, buy property and escape taxation when they retire (after a working life) should be allowed to do so"

Yes, and with full-on LVT and Citizen's income, the average/median pays NO INCOME TAX, and by and large pays NO NET TAX AT ALL, RECEIVES NO BENEFITS and DOES NOT PAY RENT EITHER. They will not pay tax when they start working OR when they retire. And they won't have to take out big mortgages either. It's the closest thing to tax free you can get.

But you clearly don't like this system so you clearly would like to stick with what we've got.

mombers said...

@Maverick: "They already pay for the services associated with the property via council tax"
So you would expect there to be no difference in the rent or price of a house 150m from a tube station to a similar one 1km from it? This is a local service paid for by public funds, so the owner should not be able to charge for a service that they are not providing themselves, no?

mombers said...

MW, re point (2) in the article, do you have an analysis and figures on this? It seems implausible. Inflated by UBR (a good tax) and no doubt includes SDLT (not a property tax).

Mark Wadsworth said...

M, point 2) is correct... depending on how you define 'property tax'.

UBR is £25 billion, council tax is mixture property tax/poll tax, another £25 billion, then there's SDLT £5 billion (is it a property tax in the wider sense? yes. Is it a tax on the annual rental value? Nope) and I suppose most Inheritance Tax relates to land and buildings, call it another £2 billion, what about TV licence? another £3 billion, so about £60 billion all in = 4% of GDP.

mombers said...

MW, in the US property taxes are quite high, but is this excluded because they are not at the federal level? My wife's cousins pay more than $1000 a month.

Maverick said...
This comment has been removed by the author.
Mark Wadsworth said...

M, that's one of the mysteries isn't it? Domestic Rates appear to be between 1% and 2% per annum on home values, but US housing is much cheaper compared to GDP, and it is conceivably true that their ratio is not much higher than 4.2% (maybe they don't have SDLT? No idea). They certainly have CGT on main residence above a generous exempt amount of half a million dollars or something though.

Mark Wadsworth said...

Mav, yes, the UK government wastes an awful amount of money, the welfare system is stupid etc, that's a quite separate issue.

But a lot of the money it wastes is merely spent to alleviate the problems which are caused by the fact it is Home-Owner-ist in the first place, i.e. subsidies to land ownership and then income and other taxes cause unemployment so they have to raise more money for make-work schemes and welfare and more subsidies to land ownership, which causes more unemployment.

As to 'entitlement' what is wrong with starting in the middle and saying that the median pays NO tax, pays NO ground rent and receives NO benefits, which is exactly what happens under my proposed system? Why should anybody collect or enjoy ground rent at the expense of 'everybody else'?

Mark Wadsworth said...

Mav has now deleted the comment to which I was replying, which is his good right.

Maverick said...

Mark ..

I would have no problem with a fair LVT system or any other 'fair' system of taxation.

At the moment the real problem is the size of the "welfare system" and the public sector (including the fact they are allowed to set the size of their own pay packet, perks, expenses and the gold plated pensions)

Until the tax burden is reduced in the UK there is no tax system that could possibly be fair.

Fairest system is one where those that worked and paid into a scheme benefit ... not those that have done **** all.

Take the NI contributions Mark ... I worked for ten years solid, permanent jobs and self employed .. however when I was in a period of unemployment .... I was told I could NOT claim 'unemployment benefit' as the year that they referred to in order to calculate my benefit was the year that I was self employed and I had not 'bought/paid' for the correct stamp. So despite never have taken a penny out and paid in for ten + years .... I could NOT avail myself of that benefit .. Yet 'long term unemployed' can claim it for as long as they like without paying a goddam penny into the system.

The whole system is one big joke Mark .. and until people realise that they are not owed 'a certain standard' of housing, weekly living allowance and god knows what else; then the UK will never change ...

As for LVT .. I have no objection to it as a fair way of raising tax. I object to how the taxes are being spent.

Road tax should be for roads.
Council Tax/LVT should be for services provided.
Public servant pay should be capped and not at 'private sector' wages.
Public service jobs: should be welfare jobs
Vat or taxes on certain goods should go toward maintaining a government
Charaties should be exactly that ... the likes of ASH or any other 'tax funded' quango/charity should be scrapped or fund themselves not helping themselves to taxes paid by smokers (the NHS should get that and NO I am not a smoker)
The government should not be allowed to overspend ... it's not their f***** money !!

The whole system is smoke and mirrors Mark ...

I could go on but you get my drift ...

Maverick said...

No I only deleted it since there is no edit facility ...

Mark Wadsworth said...

Mav, lack of edit function is indeed annoying, but my reply doesn't change.

Of course LVT is for "services provided" nothing more nothing less, that is the whole point, it's the closest thing to a free market tax. But LVT is for the VALUE of services provided as assessed by the free markets, it is not an arbitrary charge for the COST (like most existing taxes). There is a complete and direct link between what you get and what you pay, because if you think you're paying too much you can move elsewhere and reduce your bill.

Maverick said...

But a lot of the money it wastes is merely spent to alleviate the problems which are caused by the fact it is Home-Owner-ist in the first place, i.e. subsidies to land ownership and then income and other taxes cause unemployment so they have to raise more money for make-work schemes and welfare and more subsidies to land ownership, which causes more unemployment.

>>>>

Oh come on Mark ..

They strangle small businesses with massive red tape, over regulation, minimum wages and too much taxation.

Their short sightedness has put thousands of pubs to the wall .. since the non-smokers didn't really use them other that a blue moon and didn't change that habit.

They have so many ridiculous quangos and government funded agencies it's not funny


Home-ownership doesn't cost the government that much .. if it does cut the subsidies simple .. doesn't mean you automatically have to tax them

The only reason the UK is floundering is the size of the public sector and welfare state v the private sector and it is well over the 50% mark and if you included so called private organisations such as ASH etc ... I am guessing it's close to 65%/70%

Mark Wadsworth said...

Mav, I know more about these things than you do.

Yes, the red tape is spiteful, but that's done at the behest of large firms who want to make life difficult for small firms. That's rent-seeking which is just an off-shoot of Home-Owner-Ism. And has bugger all to do with the tax system as such.

And they have the all quangoes and public sector over-employment mainly to try and keep unemployment figures down - and what causes unemployment? Taxes on income and output!? And why do we have taxes on income and output? Because the Home-Owner-Ists refuse to pay tax on their monopoly privileges!

Home-Owner-Ism costs us, the people, the economy (whatever you want to call it) exactly as much as all the income tax, NIC, VAT etc collected, and the government only collects these taxes because it is voted in by stupid Home-Owner-Ists who can't contemplate a shift to LVT/CI.

Any economy run along Home-Owner-Ist lines is doomed to flounder, even in the absence of high income taxes - which is why they had credit/land price fuelled recessions every 18 years in the USA in the 19th century. And which is why life was pretty shit for 99% of the UK population in the 19th century, the problems can all (or mainly) be traced back to Home-Owner-Ism or Landownerism (as it use to be known), i.e. light taxation of land ownership. End of discussion.

Saying you want to have untaxed land ownership without income tax and without recessions is like saying you want to drive a car without using energy.

Bayard said...

"The problem is the system is corrupt and full of public schoolboy ponces sucking at the teat of the private sector ..

So your constant harping on about LVT v Income tax quite frankly sickens me"

I see, so as far as you are concerned, the ONLY thing worth doing to reform the system is to put a lot of "public schoolboy ponces" onto the dole. When that is done, everything will be perfect, will it? No need for any other reform then? I realise that's probably not what you meant, but that's certainly what it sounds like.

"The only reason the UK is floundering is the size of the public sector and welfare state v the private sector and it is well over the 50% mark and if you included so called private organisations such as ASH etc ... I am guessing it's close to 65%/70%"

More government spending goes to the private than it does to the public sector. The amount the government gives to welfare state is dwarfed by the amount it gives to it its mates in the private sector. Yes, government spending should be cut, but the welfare state is not the place to start. Yer average quangocrat costs as much as fifty people on the dole, and that's just their salary. You could probably double that if you include the amount of public money they spend every year on stuff that doesn't need to be done.

Bayard said...

"Forcing people out of their homes is ugly.(7)"

Mark, it might be worth flagging up this Big Fat Lie by inference, the BFL being that arrears of LVT will ONLY be collected by a forced sale of the debtor's home and that no other assets will be taken into account. The other BFL by inference is that this is the only way that you will ever lose your house through being in debt. Comrade F was very fond of this BFL, IIRC.

Mark Wadsworth said...

B, first comment, ta for back up. Of course, ultimately it's the "public sector school boys" i.e. landed gentry who have always 'owned' most of the land and thus gleefully imposed income tax on the rest of us in order to build all the lovely roads to boost their land values etc, and to pay for the police to fight of the peasants. So maybe Mav is not entirely wrong on that point.

Re second comment, the risk free roll up is only for pensioners, I don't see why it should apply generally - as it would only be possible for a household to run up net arrears (LVT minus CI) if they occupy an above average home.

Maverick said...

"More government spending goes to the private than it does to the public sector"

The government only receives monies from the 'private sector' it has no magic money tree ... FFS !!!

Maverick said...
This comment has been removed by the author.
Mark Wadsworth said...

Mav, as ever you betray your ignorance.

The amount of money which the government pays to the nominally private sector (welfare to work businesses, PFI, windmills, BAe systems, banks, subsidies for home builders, home owners etc blah blah blah) is the largest single item of govt spending, it's about forty per cent, far larger than public sector salaries or welfare+pensions.

Sure, the tax it gets is from the truly private sector (by definition), but we knew that already.

Maverick said...

"first comment, ta for back up. Of course, ultimately it's the "public sector school boys" i.e. landed gentry who have always 'owned' most of the land and thus gleefully imposed income tax on the rest of us in order to build all the lovely roads to boost their land values etc, and to pay for the police to fight of the peasants. So maybe Mav is not entirely wrong on that point."

Mark ... not everyone who owns land is 'landed gentry' and I know a farmer who left school at 14 years old (in his 70's now) and turned around an almost bankrupt business. He has worked harder all his life (even now) than you every will ... so you your sweeping (know it all) generalisations frankly do make me vomit ... Why the fuck should he have start paying LVT because he has land. His family bought and paid for that land and have worked hard and to be honest he is no better off than scum on benefits ... except he has his pride and still works at aged 78.

Maverick said...

Land can be bought and sold. It can be retained by families. If families prefer spending their monies elsewhere rather investing in their futures and their children's future that is up to them.

All I see here is the 'green eyed monster' syndrome.

Mark Wadsworth said...

Mav, slaves can be bought and sold, so can illegal weapons, so what? Land/location only has value and increases in value because of the efforts of others. That's a settled fact.

it is quite separate to the actual earned income e.g. farming income which is on top of that and quite separate e.g. the income that a tenant farmer earns is EARNED and the rent the landlord collects is UNEARNED, so an owner-occupier farmer has a mixture of both.

All I can see in you is the green eyed monster who doesn't like people who earn a lot of money on the back of their own skill and efforts and who would pay considerably less tax under LVT. So there.

PS, I know dozens of people who left school at 14 and have set up their own businesses and have struggled on into their seventies, despite the crippling tax burden, who never got a penny of the subsidies which farmers get, so there.

PPS, I have done handsomely well out of Home-Owner-Ism, probably far better than you, there's no green eyed monster syndrome at work here at all.

PPPS, all your "Killer arguments against LVT" were pretty rubbish and I've dealt with it all before. Can you come up with a single original one, I'm running out of raw material for the series. Or is your Monty Pythonesque farmer who left school at 14 to lick the roads your best shot?

Lola said...

Seen this?

http://www.telegraph.co.uk/comment/columnists/charlesmoore/9278899/A-blessed-plot-but-who-does-it-belong-to.html

An almost perfect argument for LVT, I would say.

Mark Wadsworth said...

L, every now and then, Charles Moore goes off message and says something enlightened. And it is all the more joyous for that.

Bayard said...

"Mark ... not everyone who owns land is 'landed gentry' and I know a farmer who left school at 14 years old (in his 70's now) and turned around an almost bankrupt business. "

Do you actually know who owns most of the land in the UK? Suprisingly little of it is owned by farmers, like your example. Anyway, if you'd actually read any serious cases for LVT, instead of the Daily Mail, you'd know that the value of agricultural land is so low as not to be worth taxing.

"scum on benefits"

So everyone on benefits is scum are they? There are jobs for everyone, if only they would get off their fat arses and apply for them are there? Really? Millions of unfilled jobs across the country, are there? You should try to get out more, you really should.

Bayard said...

Mark, you've rather missed my point on the BFLs, in that the lie is that your home is the good that is distrained first if you owe money for LVT, before anything else, as if the tax was secured on the house, like a mortgage, whereas in real life it would be like any other tax debt.

Mark Wadsworth said...

B, good point re LVT debts being like any other tax debt.

As to the specifics of farmers and LVT, we agreed that one ages ago. Farmland would be, for the foreseeable future and until new facts come to light, completely exempt (values fluctuate a lot over short periods), but the farmhouse itself would be liable to normal domestic LVT and any buildings would be liable to normal commercial LVT (farmhouses are liable to council tax anyway, significant farm outbuildings are liable to Business Rates anyway, both are liable to SDLT and IHT and so on, so no huge change here).

So fair's fair - the farmers lose their agricultural subsidies but don't have to pay income tax or NIC any more, which probably nets off to very little. Actual cash farm rental income of landlords would be liable to stiff income tax.

Derek said...

Hard-working people like Maverick's farmer friend are exactly the sort of people who would do best under a Land Value Tax system. If LVT + Citizens Income had been in place instead of Income tax + Welfare during the last 60 years, he would have done even better than he apparently has.

Mark Wadsworth said...

D, you know that. I know that, but Mav is just totally anti-LVT and works on the basis that as he doesn't like LVT (which I support) I must therefore support everything which he opposes, so by proxy, I am now to blame for red tape, quangocracy etc.

Further, having worked himself into a frenzy and not having much grasp of the fact that residential land values are a hundred times higher than agricultural land values, decides that I must hate farmers as well (despite I depend on them for the food I eat, just like anybody else, and I am very conscious of this and don't begrudge farmers a penny of their income).

But at least he doesn't go as far as IanB who said if I support LVT then I'm either a paedophile or a Nazi (I can't remember which).

Maverick said...

Yeah .. nice one Mark.

Land has value .. others invested and didn't spend their extra money socialising, beer fags, prostitutes or whatever they spent or wasted it on .. nice cars etc. Whether it is was agricultural or residential.

It's simple you now want a share of someone else's pie as well ... at least be honest.



Your argument rests on .. they have land now .. it's not fair ,,, boo hoo !!!

As for a frenzy Mark ... nice rant there mate !!

Maverick said...

D, you know that. I know that, but Mav is just totally anti-LVT and works on the basis that as he doesn't like LVT (which I support) I must therefore support everything which he opposes, so by proxy, I am now to blame for red tape, quangocracy etc.

I never blamed you Mark .. I said that is the real problem .. LVT v Income Tax or any other tax is NOT the problem. You can tax people in any 'fair' manner you choose but in teh end it will solve nothing while corrupt assholes are in still in charge and spunking it up the wall ...

Maverick said...

So Mark

Who exactly is exempt from paying domestic LVT and commercial LVT.

If there is no landlord and nobody is paying rent for the use of either a domestic property or a residential property .. then there is no tax to pay ...

Or are you saying that ... The government decides what the rental value would be and the owner pays that whether he has an income or not.

Oh I see another layer of parasitical 'experts' paid god knows what to assess determine 'rental value' because you assholes know what is best 'for the public good'

You a member of 'Common Purpose' Mark ... come on do not be shy .. tell us all !!

Maverick said...

" Of course LVT is for "services provided" nothing more nothing less, that is the whole point, it's the closest thing to a free market tax. But LVT is for the VALUE of services provided as assessed by the free markets, it is not an arbitrary charge for the COST (like most existing taxes). There is a complete and direct link between what you get and what you pay, because if you think you're paying too much you can move elsewhere and reduce your bill."

What a load of tosh Mark .. LVT for services provided ??

You'd have to overhaul the entire system and ensure transparency in councils/government as to what exactly the money is spent on and then make them accountable.

You'd have choice ... don't make me laugh it would be pay up or else .. like anything else the government does.

The only choice is which set of intellectual cretins are put in charge .. short of a revolution !!

Kj said...

So then what's a just tax-system look to you mav? Income, which is wholly derived from individual effort is ok, but land, that derives it value from anyone but the owner, is off limits?

Mark Wadsworth said...

Mav, do you have any grasp of the real world or do you just do Home-Owner-Ist rants?

Real world: I bought a house for £95k in 1998 (got a £15k totally undeserved rebate from the Highways Agency like everybody else on my street) , lived in it, paid off the mortgage, redid the kitchen and sold it for £400k in 2008.

Are you saying that all this lovely money came my way because I "invested and didn't spend my extra money socialising, beer fags, prostitutes or whatever they spent or wasted it on .. nice cars etc."?

Seriously? Because one of the dangerous mistakes that anybody can make is to believe his own propaganda.

I am perfectly aware that I made all this lovely money purely because the Labour government realised that it is electoral gold if you can manipulate things to keep house prices going up, something they learned from Thatcher and took to extremes.

You see, I live in the real world, and would consider that the Home-Owner-Ist Labour government provided me a service there.

Now, you have a choice here, you can admit that I in fact incredibly hard working, having somehow put in twice as much effort as a normal working man for the ten years I owned that house, or you can admit that land ownership is a f-ing huge great scam engineered by the large landowners, the bankers and the government.

So what is it: I am really that hard working and prudent etc or is land ownership a f-ing huge great scam?

Mark Wadsworth said...

Kj, Mav doesn't answer questions, he's a Hone-Owner-Ist.

All he does is insult people. Today I'm 'Common Purpose'. I'm not sure if that's better or worse than being called a Nazi Paedophile.

Maverick said...

So then what's a just tax-system look to you mav? Income, which is wholly derived from individual effort is ok, but land, that derives it value from anyone but the owner, is off limits?
>>>

You argument is still flawed.

People who work and save hard (pay their taxes on that income) then invest those savings by buying property .. should be penalised for their efforts.

While those that work and fritter away their income and possibly spend beyond their means) and do not save anything themselves should then expect those who made sacrifices over the same years to now pay tax because they bought property instead of fags/booze/latest gadgets/new car etc ...

Very fair .... NOT

Mark Wadsworth said...

Mav, nice try, but your still doing Daily Mail group think:

"People who work and save hard (pay their taxes on that income) then invest those savings by buying property .. should not be penalised for their efforts." (I assume that the word 'not' was missing).

Kj (and I) were asking the question: would it not be better if people didn't have to pay income tax (or NIC, VAT, corp tax, same thing) in the first place? As a slightly separate issue, what is wrong with people paying for the value of benefits they receive in their capacity as land owner? That's not 'penalising effort' because owning land requires no effort whatsoever.

Kj's argument is not flawed in the slightest, in any event, he merely asked a question.

Maverick said...

"scum on benefits"

So everyone on benefits is scum are they? There are jobs for everyone, if only they would get off their fat arses and apply for them are there? Really? Millions of unfilled jobs across the country, are there? You should try to get out more, you really should.

@Bayard

Don't put words in my mouth. My statement is as read. I refer only to the % who constantly take the piss. If you think that there are none then you really should get out more often.

Maverick said...

Mark .. I'll say it again. I do not own a home, therefore I am not a Home_Owner 1st or whatever you would like state. I am not smoker, yet I would argue that pubs should not have been forced to ban smoking. Does that make me a smoker?

In your case you bought your house. Great
I'd argue that the 15K grant should be classed as income and taxed. If your house has shot up in value, then great. If you sell the house and buy another you pay stamp duty/tax .. If you sell up completely you pay capital gains.

Personally I do not really care Mark .. one way or the other.

The UK is fast becoming a cesspit and a joke ... TPTB have nailed that coffin lid shut. It's not like you get to make the decisions anymore .. 80% of them come from Brussels anyway. Once the EU takes over completely .. LVT will be the least of anyone's worries.

Mark Wadsworth said...

Mav, you are a hard core Home-Owner-Ist, being a cult which believes that it's OK to tax incomes but completely against the pale (and a sign of being a Nzi, a paedophile or a member of COmmon Purpose, whatever that is) to tax the rental value of land.

The EU is a separate debate, sure we'd be better off out, that is NOT an argument in favour of taxing incomes and not taxing the rental value of land.

Kj said...

Maverick: Feel free to answer without mixing people spending money on prostitutes and fags and beer in with the whole issue; is earned income a more just source of tax than property?

Maverick said...

Mark

Two individuals under LVT.

A earns £100,000.00 per week. He lives in a very small flat because he only has to work two weeks on and has two weeks off. (or he can work remotely) The other two weeks he jest off to his Villa in Greece or South of France. (or he flys back for the occasional meetings).

B. Has a larger 2 acre property and decided to retire at 45 having worked and paid his taxes. He has a few chickens (personal use) and has an aquaponic set-up for growing fish and vegetables. He is self sufficient and living off his retirement fund (savings + small annual income less than tax allowance).

How do you balance this under LVT then ??

Mark Wadsworth said...

Mav, do I detect the Green Eyed Monster here? Kj and I have said that we are against taxes on income, regardless of whether they earn £10,000 or £100,000,000 per week. Is that so difficult to grasp?

And you are doing a diagonal comparison. Under LVT, yer international jet setter who has a small, cheap pied a terre in the UK would obviously pay less than somebody who owns a more valuable plot. So why do you even ask such a dumb question?

Kj said...

Mav, the LVT proposal presented hereabouts also includes a return of LVT through a citizen's income, which for most people will net off their tax bill to zero, including the man with a smallholdning, it all depends on the value of land. Are there any particular reasons why the man who flys off to the riviera every other week should pay significantly more taxes than what the land he occupies is worth? I thought you quite liked the idea of people working hard? Remember also his office will be paying LVT, the restaurants and shops he frequents will pay LVT, etc. What he pays in LVT is a reflection of what he and the market think's is the benefit of living on that particular piece of land, and those benefits are produced by everyone else (both private and public), not the person he bought the apartment from.

Anonymous said...

Two individuals under LVT....

...(much irrelevant twaddle)

How do you balance this under LVT then ??


Balance what? You haven't identified what you think will happen and why it would be bad.

You appear to be implying (by your use of language) that you think A is more worthy of 'punishment' than B, but you give no reasons why. What is A doing that is abhorrent to you? What is B doing that is so righteous? More to the point, why should the government *care*?

What exactly are you expecting to be balanced here? You've talked a lot about fairness without actually discussing why something is or is not fair. These things matter.

Most importantly for your examples, it's not the plot *size* that matters, it is the plot *value* (of which size is a *factor*, not the entirety). In particular, you haven't said *where* these plots are. Is A's flat in St. Albans or St. Austell? Is B's 2 acre plot in the Scottish Highlands or Canary Wharf?

So far you have demonstrated no understanding of any principles, not even regarding your own opinions, and it shows in your slack arguments.

Bayard said...

"Actual cash farm rental income of landlords would be liable to stiff income tax"

Now you're complicating things again. Anyway, the problem about LVT on ag land is not that it's too small to worry about, (obviously not, if you propose to tax the rent anyway - there's bugger all difference between LVT (a tax on rent) and income tax on rent) but it's more than 100%. This scholarly work www.mendelu.cz/dok_server/slozka.pl?id=51329 gives the value/rent ratio as 4.3% for the UK, so an LVT of around 6% on value would be a 140% tax on rent. A simpler system would be to have LVT as a percentage of the rentable value and have a personal allowance whilst reducing the CI accordingly.

Maverick said...

Mav, do I detect the Green Eyed Monster here? Kj and I have said that we are against taxes on income, regardless of whether they earn £10,000 or £100,000,000 per week. Is that so difficult to grasp?

And you are doing a diagonal comparison. Under LVT, yer international jet setter who has a small, cheap pied a terre in the UK would obviously pay less than somebody who owns a more valuable plot. So why do you even ask such a dumb question?

LMAO ... so our political masters could fleece the public with their massive salaries and then position their assets outwith the UK system ... Do me a favour .. FAIR ???

Maverick said...

In short .. now you have your house bought and paid for .. you'd like the tax regime changed so it would favour you.

Maverick said...

http://bastardoldholborn.blogspot.in/2012/05/tally-me-banana.html

You might want to read his ramblings .. you might even learn something !!

mombers said...

@Mav (a few back):
A earns £100,000.00 per week. He donates most of it to a fake charity which recycles the money back to him, puts the rest of it in a pension, etc, resulting in a tax bill of £very little. He has a very expensive house which is untaxed and imposes a significant burden on others who are left with less housing to fight over.
B earns £1000 per week. The tax avoidance schemes that A uses are not profitable on a modest income like his, so he has to pay PAYE and NI of £292.90
You can try to close down the loopholes all you like, but on a high enough income, it is always profitable to pay an accountant to make your tax bill go away. Not possible under LVT.

mombers said...

Allister Heath is not very honest here. He should call a spade a spade and say that taxing property/land reduces its capital value and hence the assets available for banks to extract rent from.

Maverick said...

You can try to close down the loopholes all you like, but on a high enough income, it is always profitable to pay an accountant to make your tax bill go away. Not possible under LVT

It's already conceded if A rents or purchases a modest property then he can simply invest his earned income in a tax haven property or business abroad and under LVT any income from that source would then not be taxable ..

However LVT would simply make the UK one large slave plantation (more than it is now). Since every worker needs to live somewhere, he will only be able to afford a property which he is able to pay the tax on (since the tax has no relation to income earned).

Therefore a low paid worker who is outwith the tax bracket can no longer simply do without life's luxuries (pay the required mortgage) fags, booze, latest ipod, blackberry or whatever)in order to afford a bigger property .. because he now has fork out a tax solely related on the size of property he wishes to buy ...

At the end of the day the only fair system is one where waste and ridiculous spending by government is curtailed permanently ...


That is the real problem that needs addressed first ...

Anything else is poncey public schoolboys theorising ...

Mark Wadsworth said...

Mav, it's still not clear to me whether you just like the sound of your own bigotted opinions or whether you would like me to explain to you a) how the world actually works now (tax, economics, rents etc) and b) why things would be better with LVT not income tax.

I shall assume the former and so can't be bothered replying, you are pretty much wrong on everything you say (facts and logic clearly mean nothing to you), so I wouldn't really know where to start.

Maverick said...

A comment that applies equally to you Mark.

How the world actually works ... is it functioning correctly Mark. Is over-taxation of the masses by corrupt incompetents correct, do you think?

Your view is correct and as long as you spin your theory to suit it's fine ..

I haven't really seen you challenge any of the logic Mark .. facts or not.


Income Tax is wrong
LVT is wrong
The UK Government is shambles, out of control and they deem it their right to squeeze more tax out of their serfs to pay for that incompetence.
The UK Government interferes in things that it had no goddam right to ...

e.g ... smoking ban; that went well eh .. not only did they waste taxpayers cash funding ASH and god knows what else (money could have gone to NHS) they have put thousand of pubs out of business ... because the righteous (we know what is best) stated it would be okay ... if smoking is banned we will come in our droves ... oh what happened ... trade dwindled as smokers (main clientele) made to feel like lepers and put out in the cold to have a fag (no air conditioning/fans was too easy) now prefer to have a drink at home ...

Taxes should be raised for basic services only. Not fucking Quangos, fake charities, employing your partner as an overpaid PA, buying a second home. Ridiculous gold plated pensions; putting chavs with 11 kids into two houses knocked into one and goddam host of other things too numerous to mention;

So until the system is base lined; the constitution restored; illegal statues and acts removed; and a sound financial administration put in place then the UK will continue to be a joke.

How the world laughed when 'bright boy DC' let slip how he was glad John Terry was banned .. a man yet to be convicted. What a football enthusiast ... no idea why he wasn't playing; yet opened his mouth and let his belly rumble ... much like you Mark ...

I am right ,, I am an intellectual .. I know best .. you sound like the jeering buffoons that are running the EU sideshow ... how's that one going ...

Frankly your an overpaid accountant with a huge ego .. nothing more nothing less !!

Mark Wadsworth said...

Mav: " Is over-taxation of the masses by corrupt incompetents correct, do you think?"

Er, let me think, oooh, might that be a trick question? Jeez, you really have outsmarted me this time... Can I think about that for a few days and get back to you?

Maverick said...

Mark: "Er, let me think, oooh, might that be a trick question? Jeez, you really have outsmarted me this time... Can I think about that for a few days and get back to you?"

Do you float on your own pompous wind or buy it by the canister?

a) It wasn't hard
b) You'll only need a few days .. my you do surprise me !!

Mark Wadsworth said...

Mav, you are obviously a man who foresees all sorts of pitfalls and perils of LVT which aren't immediately obvious. Kj and I explained, we'd get rid of income tax entirely and collect revenue via LVT instead. You then said:

"It's already conceded if A rents or purchases a modest property then he can simply invest his earned income in a tax haven property or business abroad and under LVT any income from that source would then not be taxable..."

Well, call me simple, but if the UK is the only country without income tax, why would people invest their money abroad where income IS taxable (or stick it in a tax haven, which in turn can only invest in a country where income is taxable), rather than leaving it in the UK/investing it in the UK to grow tax free?

So I bow to your greater wisdom and please, can you run that by me again. I've only worked in international tax planning for a decade and our rule of thumb is "invest in countries with no income tax, no inheritance tax" etc, but obviously we've all been wrong! Shit!

Maybe you could also explain why [people you don't like] would be able to afford 'a modest home' but [people you do like] won't be able to? How many modest homes would [the people you don't like] actually occupy for themselves, and how many would be left over for [people you do like]?

Maverick said...

A: UK taxpayer/citizen still earns the large majority of his income here: what additional taxation if any is earned as income/properties abroad is hardly relevant; nor is he going to be fussed paying it; giving the luxury he lives in .. besides the UK climate is hardly enticing is it.

Sorry if it was confusing the issue .. I did not make it clear his foreign set-up is not a major earner.

As for inward investors I wasn't aware of foreign investors having to pay income tax ???

My assumption was foreign investors only pay tax on capital gains or any profits ... I wasn't aware they'd be stupid enough to pay themselves a salary which was subject to income taxation ..

therefore LVT makes it more attractive how?

Mark Wadsworth said...

Mav: "As for inward investors I wasn't aware of foreign investors having to pay income tax... My assumption was foreign investors only pay tax on capital gains or any profits???"

Aha, so you know nothing about the UK tax system or foreign tax systems (apart from just having completely contradicted yourself), now is not the time or place for a ten thousand word essay.

It's getting rid of income tax which makes it attractive, and to prevent the surplus from falling into the hands of the Home-Owner-Ist elite (bankers, large landowners, politicians), to prevent boom-bust cycles etc, it gets hoovered up and dished out as a Citizen's Income so that median household in median home pays neither rent nor tax nor receives net cash benefits, they live off their earned income alone. People just get a better deal living and working in the UK. A net zero tax bill and cheap housing is the best deal you are going to get anywhere in the world.

It is simple maths and logic.

Maverick said...

Also assumed foreign investors are still subject to taxation on any income/profits in their own country .. or is that a fallacy ?

Mark Wadsworth said...

Mav, yes, fair assumption (except for a couple of very small tax havens). So [the people you don't like] have a choice: invest in UK income tax free or invest elsewhere and pay tax. What do you think they will choose? Where do you think the new investment will go?

And if [the people you don't like] buy themselves a small flat here and live mainly abroad, they will pay oodles of income tax abroad (income tax is on a residence basis). Again, can you explain to me why they would do this? Why not stay resident here and invest or spend your money here and restrict themselves to the occasional holiday?

mombers said...

@MW, cue explanation for Mav of the UK tax system for UK sourced income paid to non residents

Mark Wadsworth said...

Mom, why? Surely he knows all this, being the self-declared expert on everything? What are my years of experience compared to his incredible insights.

PS, it's at least 20% on rental income, 0% on interest income, normal VAT, income tax rates on trading income, SDLT and IHT as normal on everything, the only break worth mentioning is a narrow CGT exemption for 'investment properties'. But of course Mav knows all this stuff.

Maverick said...

Actually I like the plan Mark ... I must confess.

However the main hurdle is still 'politicians' ,the system and the amount of revenue required to be generated.

Bankers and politicians are unlikely to relinquish the reins so easily ....

But you can dream ....

Mark Wadsworth said...

Mav, and I like your plan about cutting the size of the state, getting rid of quangos, getting out of the EU and so on, it's all in the manifesto.

I trust you are aware that running the core functions of the state (law and order, defence, immigration, road repairs and refuse collection) is naff all? It's about five per cent of GDP. Any LVT in excess of that goes as Citizen's Income, the CI is just a balancing figure to keep money out of the hands of the politicians/bankers etc.

Maverick said...

@MW, cue explanation for Mav of the UK tax system for UK sourced income paid to non residents

Define exactly what constitutes non-resident income for a foreign investor ..

dividends? expenses incurred (flights/hotels/dinners/entertainment) ??

Just curious

Thanks

Maverick said...

I'd vote your manifesto Mark .. and I'd vote for any party serious about reforming the nation.

But as with any model .. whether yours works or not relies solely on the integrity of those who implement it.

A fair open and transparent system where corruption and dishonesty is severely punished is the only way.

I wish you luck and hope you succeed ...

Mark Wadsworth said...

Mav, who exactly counts as non-resident or non-domiciled is so heinously complicated that you might as well just apply common sense/guesswork. With a grey area conveniently big enough to accommodate a lot of Russian and Arab oligarchs. And UK source income is what you think it is - it's money earned from the UK (rent, interest, profits, wages).

"whether yours works or not relies solely on the integrity of those who implement it."

Agreed. But that in turn depends on voters understanding what's going on and e.g. how much tax they actually pay - being presented with a single annual bill makes it about as clear as it can get.

Maverick said...

I actually promote UKIP as much as I can Mark ... so sorry for riling you. :)

I don't understand why UKIP didn't win any seats or why the public continue to vote for the big three (I was a Tory voter; but Cameron is a complete weasel and I no longer trust the integrity of that party)

For me .. UKIP is the only way forward for the UK and I pray that you get in sooner rather than later.

But you will have a hell of a mess on your hands ....

Mark Wadsworth said...

Mav, feel free to rile away, I've had worse.

Bayard said...

" I refer only to the % who constantly take the piss. If you think that there are none then you really should get out more often."

No, I don't think there are none, but if the ones that "take the piss" are only a %age and the remainder can't find a job either, what hope is there for the lazy ones? Even if the lazy bastards did get a job, they would only be depriving some hard-working job-seeker of it, so society is better off with them doing nothing.

mombers said...

@Bayard, agreed, a lot of the unemployed are only in such a state because the government has destroyed their jobs with VAT, NI, income tax, etc. It's only fair that they get some compensation if they suffer unemployment at the hands of a third party. A huge waste of time and human capital, but it's the choice we've made.

Mark Wadsworth said...

B, you've made that argument before and I have used it myself to devastating effect :-)

M, yes, there are inherent dead weight costs associated with taxing incomes, but let's say we did just have a flat rate of 30%, no VAT, no NIC etc, the deadweight costs of that would be quite small, maybe 5% of GDP, scarcely worth worrying about...

... but a lot of this unemployment and misery is caused by recessions, and recessions are caused by financial crises and land speculation - even in the 19th century, when governments only collected 10% of GDP in tax (the deadweight costs of which must have been about 0.1% of GDP), we still had recessions and unemployment and grinding poverty etc.

So ultimately the simple fact of NOT having LVT has huge dead weight costs; which is an unknown figure on top of the guess-able figure of the dead weight costs of income tax, VAT and so on.

Derek said...

Bayard raises a good point there. Why would you want to put a lazy person in a job when a hard-worker would do it better.It reminds me of something similar which would affect everyone, employed or unemployed after an LVT/CI system is put in place.

I've been doing a little spreadsheet work recently looking at what happens when you mix people of varying ability with plots of land of different productivity. And it seems to show that just as a high-percentage LVT encourages a plot of land to be put to better use, a high percentage of that LVT returned as CI encourages people with low ability and high-value land to swap their land with those with higher ability owning low-value land because after the swap both people are better off. Of course Mark has been saying that this sort of trade up/trade down would happen for some time but it's nice to see the figures backing him up.

So getting back to Bayard's point, it would actually better for all of us if the lazy and feckless who are employed and "working" were put on the dole and replaced by those hard-workers who are currently unemployed since the monetary cost would be the same but the amount of "stuff" produced would be greater.

Sarton Bander said...

MW It's a vitally important point that the TPA don't understand is that the State NOT taxing land does not reduce the tax, it just redicrects it to Landowners. Thus it has a negative effect on the country.

Anonymous said...

Mark I thought you were joking about IanB calling you a paedophile but he just said the same thing at Tim Worstall's blog about a carbon tax.

http://timworstall.com/2012/05/23/hang-the-fuckers/

Mark Wadsworth said...

D, sounds fun, email me the sheet please.

SB, true. But the Homey/FL view point is that something only counts as a tax if it goes to the government, they refuse to accept that taxes can be collected by nominally private individuals in any case where a state-protected monopoly is involved.

RA, why would I make jokes about something like that? Ta for linking to the ES headline somewhere else on the web (wherever it was).

Derek said...

Sure. Comments/changes welcome. Take a look on your Google Drive/Documents. I've shared them with you.

Mark Wadsworth said...

D, cool, very modern, I've downloaded and will have a look.

Anonymous said...

Mark, I leeched the Standard headline at the UK Libertarian Forums. Actually now that I think about it I should have asked permish first or re-hosted it, I just got lazy.

Mark Wadsworth said...

RA, why on earth would you need to ask my permission? You ought to be asking the publishers of the Evening Standard :-)

Benjamin said...

"Forcing people out of their homes is ugly"

Forcing people to stay in their homes is worse... its to expensive to stay and to expensive to move. This is why our elderly is becoming very poor.

I live in Sweden, we have the problem that noone can move from their home.
http://www.landvaluetax.org/frequently-asked-questions/why-are-we-against-capital-gains-tax.html

Mark Wadsworth said...

B, yes, but in the UK, any tax that has anything to do with residential land is regarded as an abomination, including capital gains tax (which does not apply to your main home in the UK).

Benjamin said...

It´s strange considering that OECD writes:
"The analysis suggests a tax and economic growth ranking order according to which corporate taxes are the most harmful type of tax for economic growth, followed by personal income taxes and then consumption taxes, with

recurrent taxes on immovable property being the least harmful tax.

The explanation for these findings relates to the efficiency characteristics of the different taxes. Taxes that have a smaller negative impact on economic decisions of individuals and firms are less negative for economic growth. In general, income taxes have larger effects on firm and household decisions than (most) other taxes and therefore create larger welfare losses, ceteris paribus. A growth-oriented tax reform would therefore shift part of the tax burden from income to consumption and/or residential property."
http://www.oecd.org/dataoecd/34/49/46617652.pdf

OECD recommend Land value tax in (p. 12, 13 and 17) in their latest report.
http://www.oecd.org/dataoecd/19/53/49826482.pdf

Mark Wadsworth said...

B, yes of course, we appear to have somebody on the inside at the OECD who keeps sneaking in comments like that.

I wish the OECD would make it clear what they mean by "consumption taxes" though. If they mean duties on booze, petrol, fags, gambling, then fair enough. But if they mean a blanket tax on gross income like VAT, then they've sort of defeated their own argument.