Parting shots by born again idiot Richard Dean, in response to a proposal at Lib Dem Voice to replace Council Tax with a fiscally neutral system of Domestic Rates like in Northern Ireland (i.e. a flat annual tax on all housing of about 0.6% of their current values):
Through mechanisms like what I described earlier (1), [Land Value Tax] tends to concentrate power in the hands of landowners, and tends over time to concentrate land ownership in fewer hands. In this long term this is very bad for democracy, and so very bad for an economy whose output depends crucially on the willingness of people to put energy into work.(2)
The modern economy is very different from the one even 50 years ago, let alone the times of Smith and Ricardo.(3) LVT simply isn’t an answer to today’s problems.(4)
1) He did no such thing of course.
2) No, that's the current system (heavy taxation of earned income and profits; heavy subsidies to and light taxation of land ownership) which does that. His observation is complete bollocks of course, as evidenced by the fact that the Home-Owner-Ists keep voting for heavier taxation of incomes, heavier subsidies to land ownership and even lighter taxation of land, and the Home-Owner-Ist elite (bankers, large landowners, landlords, politicians, posh estate agents, property porn stars off the television etc) keep pumping out propaganda about Poor Widows In Mansions.
If there really were something in it for them, wouldn't they have introduced LVT by now rather than phasing it out? Or does anybody out there think that these people have nothing but the best interests of maybe 1% of the population, the PWIMs, at heart and mould policies affecting the other 99% to suit? That our whole economic, social and political system has to be dictated by the interests of PWIMs?
3) Yes, the economy has progressed, as a result of which, a far larger share of GDP goes to land rents than it did when we were largely an agricultural economy, that's a simple matter of observation. Smith and Ricardo both foresaw this and explained why.
4) Not to all of them, no, but shifting from taxing earned income and profits to raising revenue from the rental value of land would solve most economic problems which are solvable, e.g. land price booms and busts with the associated credit bubbles and financial crises; the drag on GDP and unemployment caused by taxing earned income and profits; the war which NIMBYs are waging on 'everybody else'; misallocation of public and private investment etc etc. Some problems aren't solvable, so what?
The post header is TM Henry Law.
Going on the dry
37 minutes ago
7 comments:
MW, how about a graph of rents vs mortgage interest over the ages? That should provide a pretty compelling illustration of the economic truth that landlords cannot pass their costs onto tenants.
Mom, I've tried that, they're not interested. They are not interested in the fact that when MIRAS (a subsidy to land purchases) was phased out, the share of interest-to-income afterwards was the same as the share of interest-net-of-MIRAS-to-income beforehand, they're not interested in facts.
As a separate issue, I don't see why it's a KLN anyway. Even if every last penny of the tax were passed on, it would still be less than a tenant's corresponding income tax saving (tenants usually have the lowest hosue-price-to-income ratio).
I followed that particular debate, and that Dean fellow is a persistent old man, Henry Law constantly beats his every argument but then he is all over the place, classical.
By the way Mark, as a proud Sønderjyde (South Jutlander) at heart, I read a blog article at the IEA that made my blood boil (a German, Kristian Niemietz, arguing that Danes living in a part of Denmark under German occupation don't deserve a national identity and should shut up and assimilate). Looking around for more of his work I found a pseudo-KLN under the heading "Abundance of land, shortage of housing". Apparently the reason we have a housing shortage is all to do with planning restrictions. When asked "What about the fact that developers have plenty of land with planning permission but refuse to build?" His response was that that's alright, because... they must be holding out for a higher price. *facepalm*
http://www.iea.org.uk/blog/abundance-of-land-shortage-of-housing-a-rejoinder
Kj, yes, very classical. Tedious, I call it, and G-d bless Henry Law, Chef Dave and all the others who could be bothered.
RA, do you mean "Sydslesvig"? The IEA are pretty much anti-LVT, they know which side their bread is buttered.
[Land Value Tax] tends to concentrate power in the hands of landowners, and tends over time to concentrate land ownership in fewer hands.
Eh?
jH, indeed, you can't argue with somebody who says things like that. It's like saying "If we increase the speed limit on motorways to 80 mph then learner drivers won't be able to park on double yellows any more".
Post a Comment