Wednesday 25 February 2015

Killer Arguments Against LVT, Not (355)

I must have done a couple of similar debunkations before, but this is another one which has been bugging me, where the answer is blidingly obvious if you stick to, er, actual hard facts.

The KLN goes thus: "Ah, but if somebody loses their job, how will they pay the LVT?"

Let's gloss over the fact that the two-thirds of the population have exactly this problem with rent or mortgage payments (i.e. privately collected LVT) and that somehow or other as a society we cope with this (via mortgage holidays, housing benefit or mortgage subsidies, social housing etc), it's not a big problem if you look at the numbers on short term unemployment.

According to this:

... the short-term unemployment rate, i.e. the number unemployed for six months or less expressed as a percentage of the labour force, fell to a six-year low of 3.3% over December-February and is below its 3.5% average since 1995. This suggests that job losers and people entering the labour force are finding work relatively swiftly – consistent with the message of strong demand from the vacancy rate. The current 3.3% rate is close to the 3.2% level reached before the start of the last interest rate upswing in November 2003.

So one in thirty people are between jobs at any one time. A lot of that is probably 'voluntary' and many of those will have a partner who is still in work and who can pay the LVT. So call it 2% max.

As long as there are rules in place to distinguish between people whose employer has gone out of business/who have been made redundant through no fault of their own/are likely to find another job soon; and general shirkers/the long term unemployed, they could simply exempt such people from LVT. A crude way of doing this would be to give people a cumulative six-month exemption in any rolling five or ten year period, or whatever, which they can 'use' if they are made redundant. There is no perfect right or wrong formula.

So there would be a non-collection rate of 2%, which is no lower than for any other tax anyway, tuppence ha'penny in the grander scheme of things and a great reassurance to everybody in general.

And for the long term unemployed and sporadic earners, there's always social housing (which is like LVT and a Citizen's Income rolled into one).

14 comments:

Bayard said...

It would be no different from being able to claim non means-tested unemployment benefit for a fixed time after you lose your job.

Pablo said...

Doesn't this assume that everyone lives from hand to mouth? - and anyway, under LVT, wages would rise.

Mark Wadsworth said...
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Mark Wadsworth said...

B, yes. Only with an LVT exemption, people in more expensive areas would benefit more in £-s-d.

P, I am replying on their terms and their assumptions. On Planet Homey everybody lives hand to mouth when it suits them, and is not to be held responsible for doing so. The fact that there would be less involuntary employment with LVT is by the by and not central to the debate.

Random said...

Combine with a job guarantee. There, problem solved.

Derek said...

Hmm, Job Guarantee was the route that the government went down in the late '70s, early '80s for young people with the likes of the YOP and its successors. Technically it works but there'll be status-related problems with it. Ie people will say "that's not a 'real' job".

That's why I prefer the Citizen's Dividend/Basic Income alternative.

Random said...

Perhaps, but its better than keeping people on welfare.
Basic income is a cool idea, but I am doubtful as to whether it would work. People fundamentally want you to be seen doing something of value before they share their surplus with you. I think this is a bigger problem with CI than JG.
The JG wage is fixed, so to control inflation. When inflation gets higher, people move off JG. The 70s problem was strikes. JG is like an employed buffer stocks, it is counter cynical, a BIG is not.

Mark Wadsworth said...

R, if the job guarantee is in addition to Citizen's Income. that's fine, but not if it is compulsory. And it would work, there are countless examples of it and as everybody gets it, nobody ought to oppose it.

Random said...

It is not compulsory. If you don't choose to work you can rely on charity. You just don't get free handouts.
"Nobody ought to oppose it"
They shouldn't. But they do. I can't see it going through the press. People already oppose measly benefits for poor people despite all the sanctions and other BS they get.
And if you restrict it only to citizens and with open borders you are saying we should all get rich on the backs on a foreign slave population. WTF?

Mark Wadsworth said...

R: "People already oppose measly benefits for poor people despite all the sanctions and other BS they get."

Yes, it's a question of selling the Citizen's Income as a generous personal allowance - whether against LVT or income tax - mathematically it is exactly the same thing.

" if you restrict [Citizen's Income] only to citizens and with open borders you are saying we should all get rich on the backs on a foreign slave population. WTF?"

Er, yes, actually. You benefit if you elect the right government.

Random said...

Fair point. Is it possible to have a personal allowance of land with LVT?

Mark Wadsworth said...
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Mark Wadsworth said...

R of course it is.

This is one of my other campaigns, to get the government to lump together all the pensions and benefits it pays to an individual and all the taxes it collects from that individual and get it down to a single net sum in either direction.

So if you have a Citizen's Income of £3,700 and the LVT on your house is £7,000, then you have a net liability of £3,300.

If the LVT on your house is £1,000, then you get a £2,700 net refund.

Bayard said...

"if you restrict [Citizen's Income] only to citizens and with open borders you are saying we should all get rich on the backs on a foreign slave population."

WTF? If we have open borders, then any foreigner who comes in is free to leave if they don't like it here. That's hardly slavery is it? Somehow I think the choice of doing badly where they came from or doing better in the UK is really not going to be much affected by the fact that the UK natives will be doing better than them once they get here. Most of the world isn't as envious as the British and see things a bit more pragmatically.