Killer Arguments Against LVT, Not (249)

Meanwhile, over at The Guardian, our Homey can't resist tangling himself up in ever more lies:

Hampton Court The point is renters would be better rewarded. They would end up paying less tax, however you look at it. Homeowners woud therefore have to pay pay more or their [sic] would be a tax shortfall (even if they didn't pay income tax).

He is doggedly sticking to part 1 of KLN #248 (and is swiftly distancing himself from part 2, the nonsense that "Landlords would pass on all the tax to their tenants."), but ho hum, let's look at facts and logic.

Thirty per cent of housing is rented (eighteen per cent social housing, twelve per cent private rented) and seventy per cent is owner-occupied.

Clearly, landlords and tenants between them (however the tax is shared) would pay about thirty per cent of the LVT, and owner-occupiers would pay about seventy per cent.

If owner-occupiers thus are paying their fair share of seventy per cent of the LVT, I don't see why it is any concern of theirs quite how the thirty per cent of the LVT on rented housing is shared between tenants and landlords. That's of about as much relevance to them as the method that my neighbours use for pooling their incomes and/or sharing their household expenses is relevant to me: I don't have to pay for their food or utility bills, and they don't have to pay for mine.

You might as well argue that fuel duty, or cigarette duty, or income tax or any other tax is unfair to owner-occupiers because they pay about seventy per cent of those as well*.

As to tax shortfall, what is so difficult about the concept of replacing bad taxes on output, employment and profits (collectively 'income tax') with LVT on a £ for £ basis? If people pay £1 less in other taxes, they can afford to pay £1 more in LVT, I'm not sure why people struggle with that concept.
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* Of course, on closer inspection, you'd have to make lots of compensating adjustments here...

- Council housing is usually lower value than privately-owned housing in the same area, so less than eighteen per cent of all LVT would be from council housing; however, council tenants usually earn less than owner-occupiers, so they also pay less than eighteen per cent of income tax etc.

- Conversely, the income tax collected from the tenant and landlord of a home which is privately rented (assuming no Housing Benefit is claimed) is higher than that collected from the owner-occpiers of an identical home which is mortgage free, so shifting from income tax to LVT will reduce the overall bills of landlords/tenants.

- But then again, Housing Benefit is like negative LVT, so scrapping that and having LVT and a Citizen's Dividend instead would increase the tax take from (or reduce the net subsidy to) landlords/tenants.

- Further, tenants seldom over-occupy, they do not usually rent more than what they really need. Most second homes or holiday homes are owned by the people who use them, I've never heard of anybody renting a second home for fifty-two weeks a year just to use it for two or three weeks a year. So clearly, shifting from income tax to LVT would increase the tax collected from owners of second homes etc.

You can make infinite such adjustments plus or minus (some back up his point, some clearly disprove it) in ever decreasing circles, but the overall net impact is that the proportion of LVT paid by owner-occupiers would be within a percentage point or two of the proportion of all the other taxes they currently pay and which would be replaced.